Moody’s lowers Kindred notes to B3

Moody's Investors Service said it downgraded Kindred Healthcare, Inc.'s senior unsecured notes to B3 (LGD 5) from B2 (LGD 5) and affirmed its other ratings, including the B1 corporate family rating and B1-PD probability of default rating.

The outlook is negative.

Moody’s said the downgrade follows the announcement that Kindred completed the amendment of its senior secured credit facility, including the add-on of $200 million of term loan B.

The incremental term loan negatively impacts the agency’s expectation of recovery on Kindred's senior notes. This is because it increases the portion of secured debt in the capital structure that would recover ahead of the senior notes in a bankruptcy scenario.

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